Perceived value of retail service and loyalty to the commercial chain: the role of propensity to buy store brands

Abstract

Previous studies in the area of marketing indicate that the service provided by retail firms affects the purchasing behaviour of their customers and thus the sales and profitability that these firms achieve. In this sector, we observe that store brands are closely linked to the service provided by these commercial labels and play a very significant role in the configuration of the distributors' assortment and price positioning. This paper first identifies the determining aspects of the functional value of service, measured formatively by components of quality of service, convenience of the assortment, and price level. Second, it proposes a theoretical model of the effect of the functional value of the retail service on customers' loyalty to the commercial chain and their evaluation of the relationship that they maintain with the distributor. Finally, it examines the moderating role of propensity to buy store brands. Our investigation shows the importance of the functional value of service to the dependent variables studied, which are relevant to entrepreneurial management. Further, we confirm that there are significant differences between heavy and light buyers of store brands. Specifically, as the propensity to buy store brands increases, the value of service is explained to a greater degree by perceived price level and to a lesser degree by perceived convenience of the assortment.